- ConAgra confirmed the company was moving forward with the Lamb Weston spin-off Wednesday rather than a sale, as had previously been rumored. The separation of the frozen potato business is expected to be completed by fall.
- Thomas Werner has been named Lamb Weston's CEO. He currently oversees ConAgra's Lamb Weston and food service businesses, in addition to the Spicetec and JM Swank units ConAgra is divesting. He previously served as interim president of ConAgra's private label business, which the company divested last year, and has held various finance and managerial positions throughout the company.
- ConAgra also named Timothy McLevish as Lamb Weston's executive chairman. McLevish currently serves on ConAgra's board and was previously the CFO at Walgreens Boots Alliance Inc., for whom he now does consulting work. He also served in various roles, including CFO, at Kraft Foods Group and Kraft Foods Inc.
ConAgra originally announced the Lamb Weston spin-off in November, and the company has undergone a series of major changes since, including completing the divestment of its private label brands to TreeHouse Foods and announcing the planned divestments of Spicetec and JM Swank. These efforts will ultimately slim down the company and refocus ConAgra on its consumer brands, including Hunt’s, Reddi-wip, Slim Jim and Chef Boyardee.
The fate of Lamb Weston seemed to be up in the air. ConAgra continued to invest in expanding production for Lamb Weston, including a $30 million investment in its Boardman, OR facility, announced in March, and a $200 million investment in its Richland, WA facility, announced last month.
But when the rumor mill started to churn last month, Post was named as a potential merger partner for the Lamb Weston unit. The deal structure seemed appealing to a manufacturer in ConAgra's position as a tax-efficient way to maintain profitability while shedding several businesses. But in the end, ConAgra's executives and shareholders decided to keep Lamb Weston close and promote the spin-off's new leaders from within.
Now that ConAgra has significantly trimmed down its business model, the pressure is on for the company to turn around its consumer brands portfolio, which lacks "power brands," a Technomic exec told the Omaha World-Herald last year.
ConAgra could acquire additional consumer brands -- as it did with better-for-you frozen foods producer Blake's All Natural Foods last year -- to have a larger presence in natural and organic foods. However, unwieldy acquisitive growth over time is what brought ConAgra to the position it's now slimming down to overcome.
As the current status and growth potential of these consumer brands come into clearer focus, the divestments could continue. ConAgra could sell its underperforming brands to other manufacturers, such as B&G Foods, whose demonstrated track record and hunger for acquisitions makes it a potential buyer.